The rise of the aging-care industry in Louisville happened organically. Leaders of companies branched out on their own, starting new enterprises. Suppliers set up operations here to be closer to customers.

But about five years ago, an economic study noted that this naturally formed cluster held promise for promoting Louisville as an industry hub.

Now, economic development officials, industry executives and government leaders are focusing on creating new, high-paying jobs in the city in aging care and lifelong wellness.

Greater Louisville Inc., the metro chamber of commerce, has outlined a plan to bring more than 5,500 professional jobs in the industry to Louisville by 2018.

“We certainly want to be a place that takes care of our older population, but we’re not talking about building more nursing homes,” said Eileen Pickett, executive vice president of GLI. “We want headquarters jobs. And this has developed into a significant opportunity.”

Louisville boasts the most industry headquarters

It was in 2006 that economic leaders in the city first noticed that Louisville was becoming a hub in the aging-care field.

The Louisville Health Enterprises Network commissioned a study to examine the city’s health-related economy in comparison with 16 other cities. Among several findings was that Louisville is home to more companies in the aging-care space than any other city in the world.

Companies involved in the direct care of seniors such as Kindred Healthcare Inc., Atria Senior Living Group Inc., ResCare Inc. and Trilogy Health Services LLC already called Louisville home.

And suppliers and vendors such as PharMerica Corp. and SHPS Inc. likewise were based in Louisville.

As city leaders tried to solidify their strategy, they sought out others in the industry to gather feedback.

One of those conversations was with John Reinhart, a Louisville native and entrepreneur who had gone to work for boyhood friend Joe Steier at his Florida-based nursing home company, Signature Healthcare LLC.

Signature provided boost to strategy

“John happened to tell us he was working for Signature and that they were looking to relocate,” Pickett said. “That became our first big win.”

Signature confirmed in March 2010 that it would move its headquarters to Louisville, bringing more than 120 jobs. The company moved into the former Sears, Roebuck & Co. call center at 12201 Bluegrass Parkway in October of last year.

“People here have been just as collaborative as we thought they would be,” said Steier, Signature’s president and CEO. “People are looking for ways to share costs and risks of research and development. In the old days, maybe you had a high enough margin to do it yourself. But now we have a place where together you can take bets you couldn’t if you were by yourself.”

The Signature victory has solidified the momentum in Louisville toward becoming an industry hub.

Among the significant achievements since Signature’s relocation is its commitment to helping found the International Center for Long Term Care Innovation, or InnovateLTC.

The center will incubate and invest in startup companies that have ideas for technologies or services to help care for seniors.

Given the critical mass of companies with headquarters here, InnovateLTC officials plan to offer entrepreneurs the chance to launch their products from Louisville and have immediate feedback from their would-be customers.

“Any idea can be tried right here and then be sold all over the world,” said Reinhart, now president and CEO of InnovateLTC.

“The good news is that a lot of the things we have talked about putting in place have come to bear,” he said.

‘Runway Show’ demonstrates ideas coming to Louisville

Reinhart said the center has received about 150 proposals from entrepreneurs since it opened for business earlier this year.

He said InnovateLTC has tried to focus on the mantra of “research, validate and deliver” as it determines which companies to bring to the center.

“If it’s in the wrong stage of development or it can’t be tested, we might not be able to sign them as a client,” he said. “If it’s more conceptual, we can still provide them guidance. But we are looking for ways to make a big impact quickly.”

InnovateLTC hosted a “Runway Show” for one of its new clients this past summer. A California company called Therapeutic Industries Inc. has developed the “Ultimate Transformer,” a mobile mat table that allows physical therapists to transfer patients without risking injuries to their backs and allows patients to perform more exercises.

“The therapy mat industry hasn’t changed in about 100 years,” CEO Laszlow Bayer said during the showcase. “We believe we have the Rolls Royce in the industry.”

InnovateLTC has signed a deal to be the East Coast re-seller for the product and to help with product strategy and marketing.

Flooring materials, motion simulators also in the works

Other recent deals to come to the center include a product called Sorbashock, based on research from the University of Notre Dame. It provides a rigid walking surface that is pliable foam, lessening the risk of injuries when patients fall.

A third product, developed in the Netherlands, provides motion simulation while watching movies.

Patients who are wheelchair bound can sit on a device that looks like a horse, and the device moves to mimic a video, which might show images such as horseback riding, motorcycle riding or other activities. It has both therapeutic value for improving balance as well as entertainment.

“We see a real opportunity with quality of life and quality of care,” Reinhart said.

U of L researchers join effort

Reinhart said part of what makes InnovateLTC unique is its partnership with the University of Louisville.

The university has more than 120 researchers in eight of its schools focused on aging-care work.

“All major universities have commercialization processes for life sciences and pharmaceuticals,” he said. “But we will have the first public-private partnership to assess all of the research about aging that comes out of U of L that fits into that product or service category.”

He said seeing the value of research is easy if there’s a patent to be registered. But it’s more difficult if it’s “just good research.”

“Researchers will work with us and understand the real-world problems that the industry needs to solve,” he said. “We can bring research here and ask the industry how to use it.”

Venture fund looking for manager

To help finance the startup companies that leaders hope to develop in Louisville, a new investment fund is in the works.

Nucleus: Kentucky’s Life Science and Innovation Center LLC, the economic development arm of the U of L Foundation, and InnovateLTC have raised $1.5 million toward the fund.

The goal is to raise at least $5 million, Reinhart said.

Vickie Yates Brown, president and CEO of Nucleus, said the organization is preparing to hire a professional manager for the fund.

Nucleus also has won approval for a state grant of $1.5 million to offer aid to startup companies that choose to locate at a new research park under construction downtown on the former Haymarket property.

Brown said she has been in talks with an East Coast company she could not yet identify that has developed a diagnostic tool and is interested in relocating to Louisville to be nearer to aging-care companies.

“We are seeing a lot of activity and interest,” she said. “We are starting to generate a lot of momentum.”

Industry cluster now more inclusive

After originally highlighting aging-care providers and their suppliers or vendors, economic developers have broadened their focus to “lifelong wellness.”

That’s important for supporting local companies that continue to extend their reach to more aspects of health care.

Last December, for example, Humana Inc. bought Concentra Inc., a Texas-based provider of occupational medicine, urgent care, physical therapy and wellness services at more than 300 sites in 42 states.

And in February, Kindred purchased St. Louis-based RehabGroup Inc. for $1.3 billion to create the nation’s largest provider of rehabilitation services.

“That automatically gave us a large saturation of rehab companies here, and it’s an emerging area in health care,” Pickett said. “The more we can get connected in that area, the more opportunities we’ll have.”

Industry ripe for innovation

David Jones Jr., chairman and managing director of venture-capital fund Chrysalis Ventures LLC and former chairman of Humana, said broadening the focus makes sense.

“There are a whole host of factors that play into senior health and wellness,” he said. “Louisville has an incredible concentration of people who understand that.”

“When we get a business plan that sounds interesting, one of the first things we do is talk to the people in the industry who are close to the new thing that is being proposed,” he said. “We ask them how they are thinking about incorporating new technologies and how they deliver service.”

Jones said high-tech companies are eager to enter the aging-care space.

“Not only is there enormous room for innovation, but there is a desperate need for it,” he said. “There are federal and state budget deficits and a shortage of providers. Those two things mean we absolutely must bring technology and better coordination of care into the system.”

Competition with other cities

Economic leaders in Louisville want to claim the aging-care space before anyone else.

So, Greater Louisville Inc. has developed marketing materials that brand the city as a hub for the aging-care and lifelong-wellness industries.

“It is true that we have more headquarters in this sector than anywhere else in the world,” said Eileen Pickett, GLI’s executive vice president. “But it’s not commonly known. So we have to tell that story over and over again before another city comes along and says, ‘We’re pretty good at it too.’ ”

David Jones Jr., chairman and managing partner of venture capital firm Chrysalis Ventures LLC, said Kentucky also has an opportunity to turn a negative into an asset.

“We have one of the highest rates of obesity and smoking-related illnesses in the nation,” he said. “They are disasters for our fiscal condition as a state. But it also means we have a greater sense of urgency in learning how to address those problems. We can be smart about what we need to do to help ourselves.”

Nucleus construction key part of strategy

The International Center for Long Term Care Innovation, or InnovateLTC, currently is operating out of limited space at MedCenter 3, at the corner of Jefferson and Brook streets.

But in 2013, the center, which will help incubate startup firms that develop services or technology for aging care, is slated to be one of the anchor tenants in the first building in the Nucleus Innovation Park, which is under construction on the site of the former Haymarket property downtown.

Nucleus: Kentucky’s Life Science and Innovation Center LLC, is the economic development arm of the University of Louisville Foundation. It is building a 195,000-square-foot, $30.8 million research park bounded by Jefferson, Floyd, Market and Preston streets.

There, Nucleus will house startup companies such as those that InnovateLTC president and CEO John Reinhart is recruiting. University of Louisville researchers also will use space to develop and commercialize new products and services for the aging.

“To be world-class leaders in innovation, we must continue to invest and attract new researchers, companies and space,” Louisville Mayor Greg Fischer said. “This building will be a significant step toward that goal and will help cement Louisville’s place as the leader in aging-care services.”

Industry buy-in

In one sign of industry leaders’ interest in seeing aging-care companies grow in Louisville, monthly gatherings sponsored by the International Center for Long Term Care Innovation, or InnovateLTC, are garnering more than 100 guests.

John Reinhart, the center’s president and CEO, said the monthly “Idea Hours” event presents a nationally recognized speaker who discusses an important topic for the industry.

Kelly Armstrong, Greater Louisville Inc.’s economic development director for the aging-care sector, said she has been visiting with executives in Louisville during the past few months to learn more about the industry.

“We have to work all of our angles, making sure we have all the pieces of the puzzle,” she said. “They see the benefits of having access to a local supply chain (of innovative startups) … I haven’t found anyone yet who isn’t supportive of growing a hub right here.”